Christmas Cactus

A while ago I asked for some information on a dying Christmas cactus I had got from my boyfriends grandmother. I took people's advice, I re-potted it with good soil (mixed with the old), fertilized it, and it doesn't seem to be doing anything right now. The leaves still are wilting, and when you touch it lightly some of the branches fall off. I figured it would take some time for it to bounce back.
Anyway, I noticed that around the plant the soil is covered in green/blue fuzz. What is this? Anyway to remove it, if it's bad for the plant? What causes it? I haven't seen it before!
Thank you,